So You Want To Be An Entrepreneur?

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Greg Henley

February 4, 2009

In the classic book, The Millionaire Next Door, by Stanley and Danko, the authors found that the self-employed are four times more likely to be millionaires than those who work for others. Yet, money is only one of many reasons we want to be entrepreneurs. 

A survey I helped conduct found that the top four motivations were:

1) Frustration with employer
2) The desire for control and independence
3) The challenge
4) The desire to make more money. 

Other entrepreneurs have stated tremendous freedom, being your own boss, controlling your own destiny, being able to do "it" better, and it's less risky than working for someone else. Do any of these sound familiar? Do you have what it takes?  Of course you do. But, give yourself every chance for success and begin with a self analysis. 

Although there is no one set of characteristics that all entrepreneurs have, many exhibit one or more of the following: high self-esteem and confidence, high energy, vision, and single mindedness. Entrepreneurial leaders often do not exert authoritative control, but have tremendous ability to motivate, direct and lead people. Whether you have these qualities or not, you should ask yourself the questions listed below to minimize your chances of disappointment.

Why do you want to start the business? 

This should be your first question. Your reason may well be aligned with the reasons stated above by others or you may have other desires. Take some time to answer the question and know why you're getting yourself into business before taking the plunge. You will likely need to sacrifice and/or work very hard for some period of time.  Committing to the business full-time may require giving up a regular paycheck. Most businesses are not as successful as the entrepreneur expects it to be as soon as expected.  But the end result can be well worth the initial sacrifice. 

Is your idea good enough?

You must do the market analysis to determine if enough people will buy your product or service to make starting the business worthwhile. My first column, " Doing the Analysis,"  provided some of the key questions that need to be answered to determine if your idea is good enough. Included are issues surrounding why anyone would buy your product or service, understanding your competitors and talking to potential customers.

Do you have the necessary management skills?

Early on, the entrepreneur tends to do many things, but usually cannot do everything well. Even at the early stages, determine what you do well and find ways to complement your skills. Find friends with different skills to help you. Form a board of advisors, if you are able. They may have complementary skills and/or know others who can help.  Perhaps you can trade what you are good at with another entrepreneur who has different skills, but needs your skills. Use what and who you know to your best advantage.

How important is money to you? 

Everyone wants to make money. You must also like what you do, as you will likely spend many hours doing it. In addition, be careful with money. Not only is cash flow king when running your business, but make sure that you are good at managing your own money before you venture into business.

Can you live with the risk?

The fact is that most entrepreneurs are risk-avoiders. The best ones are able to identify the risks associated with their business and take steps to minimize the effects of those risks. Having a thorough knowledge of your market can help you understand the risks and help you navigate through them.

Plan for success.

Take time to analyze everything about the business and the market. Then, whether your goal is to make millions or there is another motivation, approach your business with confidence and passion and don't lose sight of the rewards that you seek.

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